March 11, 2020, is a milestone in our history. On that day, the World Health Organization (WHO) declared COVID-19 as a pandemic that affected more than 200 countries and territories. The pandemic scale was unprecedented, so was its impact on public health and the economy that had been left in tatters initially and now after eight months is showing some signs of recovery in some parts of the globe, observes Hani Zeini. The pandemic’s economic impact has been significant across the world, and the public health systems are undergoing the most severe crisis never experienced over the centuries.
Business closures, reduced productivity, loss of life, trade disruption, and crippling of the travel and tourism industry – the global leaders have a lesson to learn from the Covid19 pandemic about intensifying cooperation on pandemic preparedness and provide the necessary financing that aids collective action internationally.
Epidemics are global threats, explains Hani Zeini
Although the scale of the COVID-19 pandemic is unprecedented, the world is familiar with the outbreak of infectious diseases and epidemics that have now become global threats. Although the developed countries, mainly North American and Europe, have robust health systems, the developing and underdeveloped countries with low income are at high risk regarding workforce preparedness, human and animal surveillance, and augmenting laboratory resources. These countries need strong support of national resources backed by international donor funding.
Development and cooperation is critical for COVID-19
Global cooperation is critical in the fight against COVID-19 as the world engages in developing a vaccine at an unprecedented pace by squeezing the timelines for vaccine development from 15 years to almost a year or two. Global cooperation will help affected countries from a technological exchange that will boost contact tracing and manage the outbreak more effectively.
The economic impacts of COVID-19
The economic impact of COVID-19 has been very severe as it has affected income and productivity due to workplace absenteeism and premature deaths. Reduction in productivity has led to a negative supply shock as global supply chain disruptions have slowed down manufacturing activity and even resulted in the closure of factories. Added to this, is the changing pattern of consumer spending as people have become utterly spendthrift and do not want to spend unless compelled. This has happened due to a decrease in income and household finances and fear and panic about the pandemic. Airlines are facing astronomical losses, and many have gone bankrupt. The worst affected in the US due to the quarantine measures are the travel and transportation businesses, restaurants and bars, entertainment industry, and sensitive manufacturing sectors.
The heterogeneous economic impact for the countries
Despite the inequalities in the countries’ healthcare systems, there will be a heterogeneous effect on the income distribution of all countries without any distinction. For example, workers that belong to the retail, transport, industrial, and tourism sectors will suffer significant work reduction due to the low demand for goods and services and community restrictions.
Office workers are more likely to transition to remote working to ensure safety and health, impacting productivity. Financial markets will remain volatile, and it is to be seen how long-lasting the economic effects are likely to be.
